A friend sent me this interview with Andrew Bailey, which reads as one of the most candid expressions by a senior regulator of how they see the crisis now, and how they saw it at the time. Both perspectives are, of course, distorted by time and reflection, and by the circumstances of the interview. Nevertheless, the article opens an important window into some of the frustrations and visceral emotions of that time and the extent to which we live still with the fallout.

I’ve written before about the time lag between the inception of a regulatory initiative and its implementation. The Retail Distribution Review and MiFID II are good examples, as is the fundamental review of the trading book, which is about to get under way at Basel some nine years after it was proposed in the Turner Review. In this case, the example is SMCR, which came in for the banks and insurers in 2016, over seven years after the crisis, and is being extended to other regulated firms at the end of next year. This will be more than 11 years on from the events Andrew Bailey is here looking back on.

In many ways it is too early to answer the question whether SMCR fixes the issue of individual accountability. The nature and length of the FCA’s enforcement pipeline means that very few cases have made it out the other end – one of them, the Jes Staley whistleblowing case is briefly discussed in the article – and even in the banking sector, supervisors and firms are still coming to terms with its practical workings.

However, there are at least three aspects of the new regime., raised obliquely in the article that are worth exploring further to see if they provide any indicators for SMCR’s future:

1. Dominic Lindley among others has made the point that the main actors in the collapse of Barings were banned from serving as directors. Why then was the same not possible after the crisis? Andrew Bailey here says he has never got an answer to that question. In which case, it’s hard to be fully confident that SMCR is an accurate fix.

2. Fred Goodwin is described here as being “contemptuous of regulation”. Attitudes may have changed since, but it would be hard to argue that the relationship between regulators, industry and government is a settled or stable one, particularly given some of the rhetoric around post-Brexit regulation. If it does shift, SMCR won’t be sufficient to hold back the tide.

3. Finally, it’s interesting that SMCR is discussed here as a potential punishment rather than as a deterrent. This is clearly right given its origins and the language of the 2013 PCBS Report that proposed it, but a lot of the current rhetoric is around its preventative qualities. The two aren’t mutually but where the balance between them ends up will be critical to SMCR’s future.

SMCR origin lies in frustration with the apparent inability to act against the individuals at the top of a small number of very large banks. However, its scope will be much larger than this and so too is likely to be its impact. The 2008 horses have clearly bolted. Working out the role of individual accountability in what comes next is only now beginning.

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Would it be different now? 'There is now personal accountability and responsibility so I hope the answer is yes,' he says. 'I met Goodwin a few times. He was openly contemptuous of regulation. He may have been an extreme case but he wasn't unusual. Attitudes are very different today.'